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Molybdenum Mines to draw down finance |
| Molybdenum Mines will draw down the remaining $US120 million of its $US150 million interim financing deal, which will effectively see it hand over 15 per cent of the company to buy itself 12 months breathing space. Under the deal signed with US firm Trust Company of the West in September, molybdenum received a $US150 million 12-month loan in notes, initially drawing down $US30 million. The loan was to help the company maintain financial security for the next 12 months, helping it avoid considering further share issues before its flagship Spinifex Ridge molybdenum project was fully funded. Recent falls in the strength of the Australian dollar, against the US dollar, had enhanced the economics of the project, with molybdenum oxide prices at $A40 per pound, compared to $US26, the company said. Meanwhile, molybdenum was still aiming to raise $980.7 million ($US686.8 million) in capital costs for the project, including the cost of a power station for which the firm was seeking funding alternatives. Molybdenum plans to use funds from the interim financing package will be allocated to the project's critical path items with priority given to the core long lead equipment contracts previously awarded. Further to this, the company said today that it would commence a cost reduction program, starting by winding down engineering work on Spinifex Ridge, saying that this would not impact "the ability of the project to be funded". Under the deal, molybdenum must now issue warrants exercisable at 0.01 cents, that equating to 15 per cent of the company to TCW, with the notes due for repayment within 12 months. Shares in the company were up 9 cents or 26.87 per cent to 42.5 cents at 1.07pm. |
| addtime:2008-11-3 15:45:02 print |
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